OK, this could be pretty important. The Cal Supremes this morning issued the ruling in Pioneer Electronics v. Superior Court. I previously blogged on this here. Kimberly A. Kralowec, whose UCLPractioner.com, presents analysis from the plaintiff perspective, posted here and here shortly after the arguments. Today's ruling is not good for the defense.
More after the jump.
The background is this: California’s Constitution,
Article I, section 1, creates a fundamental right to privacy. In
consumer litigation, particularly that involving the Consumer Legal
Remedies Act, class actions and the Unfair Competition Law, there is
always a tension between plaintiffs' discovery demands on the one hand
and privacy rights on the other: plaintiffs will seek as much
information as they can get on other consumers’ like (or similar)
transactions, while defendants will resist this discovery, in part by
asserting the privacy rights of the other consumers.
Here’s what happened in Pioneer Electronics:
Then named plaintiff purchased a DVD player which he felt was defective, and filed a consumer class action against Pioneer. In discovery, Pioneer provided information about complaints it had received concerning this player. The plaintiff sought identifying information about the consumers who had complained. Pioneer resisted on the basis of consumers’ privacy rights.
The trial court ordered Pioneer to inform the complaining consumers, by letter, about the lawsuit, the plaintiff’s request for identifying information in order to contact them, their right to object to release of that information, and that failure to respond would be treated as consent to release of the information. The Court of Appeal cited cases indicating that the right to privacy included “the right to be left alone,” and held that the letter would have to go to consumers from a neutral, and that the consumers could not be contacted unless they affirmatively consented to the contact.
Now, in a unanimous decision, the Supreme Court has reversed the Court of Appeal, holding that the trial court did not abuse its discretion, and the Court of Appeal's approach
"was too strict and failed to consider the nature of the privacy invasion involved here and apply a balancing test that weighs the various competing interests, as outlined in our case law."
The court held that the consumers had a reduced expectation of privacy because they had already disclosed their personal information to Pioneer in their complaints. It held that disclosure of names and addresses was not a "very serious" invasion of priacy, as the information was not "particularly sensitive," as compared to financial or medical information.
So far, not too surprising, and fairly fact-specific. But then, in turning to the balancing test required by Valley Bank of Nevada v. Superior Court (1975) 15 Cal.3d 652 and Hill v. National Collegiate Athletic Assn. (1994) 7 Cal.4th 1, the court (a) held that no balancing was required, because Pioneer had "failed to demonstrate a reasonable expectation of privacy or would suffer a serious invasion of privacy," and (b) went on to conduct the supposedly unnecessary balancing anyway.
And upon balancing the interests, the Court looked at the importance of the discovery of the identity and location of persons having discoverable information; the unfairness of Pioneer alone having the contact information; and the importance of consumer rights litigation.
Thus, said the Court, the consumers who had complained had "no reasonable expectation of any greater degree of privacy" than that their privacy would be protected by the type of opt-out mailing the trial court ordered. And the trial court's order posed "no serious invasion of their privacy interests."
More analysis of this coming soon. I think there are occasions, and consumer information, that can be distinguished. But my goodness, you can't call this a defense win.